The government’s bank rescue fund said it would offer 1.39 euros per share of the commercial property lender — above the stock’s closing level in Frankfurt on Wednesday of 1.20 euros.

The fund said the offer “provides an opportunity for HRE shareholders to sell their investment at an attractive price” and was some 10 percent above the statutory minimum of 1.26 euros per share.

It adds up to about 290 million euros for all shares not yet in the government’s hands.

The rescue fund said in a statement yesterday that “if HRE were to become insolvent, this would have substantial, barely quantifiable consequences for the national and international financial markets.”

The government moved last month to take an initial 8.7 percent stake in Hypo Real Estate, buying new shares in the Munich-based company for 60 million euros.

The bank said then that it was “a prerequisite for the intended recapitalization of Hypo Real Estate” that the government “gain full control.”

A new law signed this week by German President Horst Koehler would allow the government to expropriate shareholders if ­voluntary efforts to secure stock fail. It has until June 30 to do so.

US private equity firms J.C. Flowers & Co LLC and Grove International Partners LLP and their shareholders currently own 21.7 percent of Hypo Real Estate. New York-based Flowers has said it wants to remain a shareholder.

Last week, it said it “remains open to constructive talks” with the German government bank rescue fund — but added that it “reserves the right to pursue all other options, including legal recourse, to safeguard the interests of its investors.”

Hypo Real Estate has become the most prominent German victim of the financial crisis. It ran into trouble last September after its Dublin-based unit Depfa Bank PLC failed to find short-term funding amid the widening credit crunch. Since then, the government has shored it up with loan guarantees covering some 87 billion euros.